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Utilita to pay £500,000 for overcharging customers

Utilita overcharged its prepayment customer base of almost 40,000.

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By Matt Maynard · 29th October 2020

6,600 of Utilita's prepayment customers were overcharged £22,700 above the prepayment price cap, along with another 33,000 who were overcharged a total of £105,000 above the price they should have paid under their tariff. 

Between May 2019 and September 2019, Utilita reported to Ofgem that it had accidentally overcharged prepayment customers. Following an Ofgem investigation, it was revealed just how many people had been overcharged by Utilita - both gas prepayment and electricity prepayment customers alike. 

Ofgem's price cap ensures suppliers cannot charge over a certain amount, ensuring fair prices for all. Ofgem meticulously monitors the level of the cap and suppliers' compliance with it. 

Utilita is to pay £500,000 in redress, along with making sure their customers are refunded in full. Under redress, Utilita will pay a £10 goodwill payment to all existing customers who were overcharged which could increase to £15 if the customer is on the Priority Services Register. Utilita will also pay £140 to 900 existing customers, who had applied for the Warm Homes Discount but were unsuccessful. The energy supplier will also pay £45,000 into Ofgem's Voluntary Redress Fund.

Cathryn Scott, Director of Enforcement and Emerging Issues, said:  

“Ofgem closely monitors suppliers’ compliance with the price cap, which ensures consumers pay a fair price for their energy. This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs. It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are willing put things right quickly.”

Source: Ofgem

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